Illinois high court to rule on $31B public works program

July 11, 2011|By Monique Garcia and Ray Long | Tribune reporters

The Illinois Supreme Court is expected to decide today the constitutionality of Gov. Pat Quinn's showcase $31 billion public works program, with an adverse ruling likely to throw a state in financial turmoil into even deeper disarray.

Sinking in billions of dollars in red ink despite adopting a massive income-tax increase, Illinois government could face a tumultuous time resurrecting a funding scheme to pay for the "Illinois Jobs Now" program, begun in 2009 to help build the state out of the recession.

More than just bricks-and-mortar projects involving schools, roads and sewers are at stake in the ruling by the seven Illinois justices. Also at issue are new and controversial sources of state revenue -- legalized video poker, increases in driver's license and license plate fees, higher taxes on alcohol, candy, soft drinks and beauty products -- all targeted to cover the cost of construction bonds plus interest.

The state has borrowed roughly $4 billion to get the construction projects started, said Kelly Kraft, a spokeswoman for Quinn's budget office. Kraft said $1.3 billion of that is left to spend.

Since the construction program began, the state has raked in more than $640 million from the increases in driver fees and additional taxes, according to documents on the state treasurer's website.

The increased taxes and fees have been collected for a little less than two years, and it's possible that a ruling against the state would require expensive refunds. That in a state that already carries a multibillion-dollar backlog of overdue bills.

On Friday Quinn acknowledged the need to call state lawmakers quickly back into session to adopt new funding legislation if the court strikes down the law. Still, the governor said he was optimistic the law would be upheld.

"I don't want to speculate on bad things happening. I'm an optimist, so I believe we will prevail," Quinn said. "But if we don't, then we will take immediate action. We have to do that for the jobs of the people of Illinois."

Senate Minority Leader Christine Radogno, R-Lemont, said if lawmakers have to return to Springfield, they should re-enact all of the law's key elements to comply with an adverse court ruling.

"Once we have a deal, we have a deal, and we need to stick with it," Radogno said. "That is the agreement."

The legalization of video gambling at bars, restaurants and truck stops was the most controversial element and promised the most money to the state. But the new gambling hasn't materialized because the state Gaming Board is still working to create a large new regulatory program. In the meantime, dozens of municipalities have rejected the new form of legal gambling.

A recently approved expansion of casino gambling, which is not part of the lawsuit, would require regulators to expedite video gambling.

Quinn said he would be "open-minded" about raising taxes on cigarettes to pay for construction projects as an alternative to video gambling, but some lawmakers said they should stick to the original funding plan.

State Rep. Lou Lang, D-Skokie, a longtime advocate of gambling expansion in Illinois, said he would try again to authorize video poker.

"I still think it is a good thing to do," he said. "But I don't know if the votes are there currently."

The case before the Supreme Court involves a multifaceted challenge to a series of bills approved by lawmakers in 2009 and signed by Quinn that created and funded the public works program. Rocky Wirtz, best known as owner of the Chicago Blackhawks, also heads his family's liquor distributorship empire and he alleged in a lawsuit that various provisions of the law were unconstitutional.

A circuit court rejected the Wirtz allegations. Then in January a state appellate court issued a narrow but potentially devastating decision for Quinn and state lawmakers: The law was unconstitutional because it violated the "single-subject rule" -- a provision that prohibits combining various unrelated subjects into the same bill. The appeals court stayed enforcement of its ruling while it was appealed to the Supreme Court.

The "single-subject rule" was designed to prevent bundling less popular initiatives into more palatable bills to make them easier to pass, a process known as logrolling.

Logrolling was a popular legislative tool from the state's beginnings. Legislation that then-state Rep. Abraham Lincoln pushed in 1837, linking a massive public works program with a move of the capital to Springfield, was the inspiration for the "single-subject rule" being adopted in the Illinois Constitution. The state later defaulted on its debt from the 1837 public works plan.

The appellate court ruled the various aspects of Quinn's public works program did not fit within a single broad category of "revenue" and that the state's arguments were "unconvincing."